I do not know if "Transportation Reduction" refers to the same thing as "employer commuter transportation benefits", but if it does (and it probably does), then you are correct that the Section you quote says exactly that: that commuter transportation benefits are not to be included in gross income on the state level in New Jersey.
In addition, New Jersey is somewhat unique in that it taxes a number of benefits that are not taxed on the federal level nor in most other states. For example, New Jersey taxes HSA contributions and contributions to all retirement plans except for 401(k)s.
The result is that New Jersey state income is often higher than either gross federal income or that of other states.
I doubt that you need to add these items to NY income; I assume that your employer has already done that.
If you need to clarify this, please come back and ask again.
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